Using Blockchain Technology and Stablecoins in Third-World Economies
2 min read
The world has rapid changes in technology, which means economies are adapting to meet these challenges. Blockchain is a technology that uses cryptography to securely store data and allows personal data to be exchanged between people over the internet. It is making it easier for people to share information and interact with each other through the internet, which allows for more efficient transportation of goods and labor. This allows businesses to do business without paying large fees or hiring third parties, which also eliminates many types of fraud.
Stablecoins are cryptocurrencies that are pegged to a stable asset, such as gold or the U.S. Dollar. Stablecoins are digital tokens that can be exchanged like cash, using blockchain technology. They could be used by companies in third-world countries that cannot access the American market because the American Dollar is volatile, but have much more money than they can spend because of corrupt government officials and other factors. They can help countries with unstable currencies manage their economies while preserving their anonymity.
If the theory of money is to be correct, then stable coins should have the ability to hold their value and be transparent for customers. The use of blockchain in this instance will eliminate the traditional process where central banks print money. Instead, it’ll be regulated on a decentralized network such as Ethereum with smart contracts. This way, everyone can benefit from it since they wouldn’t have to depend on any bank; they can transact using stablecoins that aren’t printed by any government.
In third-world economies, where the financial infrastructure is weak and unstable, stablecoins allow for greater participation. The combination of stablecoins and blockchain technology creates a structure in which currencies can not only be exchanged but accounted for, ensuring transparency in transactions among other features.